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WTI Predicts Weaker Wage Gains

Arlington, Va. (June 16, 2009) — Private sector wage increases likely will weaken further in the coming months, according to the revised second quarter Wage Trend Indicator™ (WTI) released today by BNA, a leading publisher of specialized news and information.

The index fell to 98.58 (second quarter 1976 = 100) from 99.35 in the first quarter, “signaling that year-over-year wage increases for most workers are going to be quite small this year,” Kathryn Kobe, an economist who worked on the development of the index for BNA, said. Annual gains overall in private industry are expected to fall below the record low of 2.0 percent in the first quarter, reported by the Department of Labor.

Owing partly to the effects of lingering high unemployment, slow wage growth likely will last into early 2010 after the expected end of recession and start of economic growth later this year, Joel Popkin, who developed the index for BNA, said. “The labor market remains weak even after a recovery is under way, and that weighs down wage growth,” Popkin said.

Reflecting the poor economy, six of the seven WTI components made negative contributions to the revised second quarter index, while one was positive.

WTI graphic


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